TL;DR
From 1900–2024, US real CAGR was ~6.5%; the average of 19 developed markets was ~5.0%. Going global gives up ~1.5% of return for materially lower country-specific tail risk.
In short
Whether US outperformance continues is the trillion-dollar question. The case for: better corporate governance, deeper capital markets, energy independence, demographic dividends. The case against: high starting valuations, regulatory headwinds, geopolitical normalisation. Most FIRE planners hedge with 30–50% non-US exposure.
We're working on a full deep-dive for this article — including historical data, charts, and worked examples. In the meantime, you can run a free simulation to explore the underlying numbers yourself.
Frequently asked questions
- How much non-US should I hold?
- Global market cap is roughly 60/40 US/non-US. Anything from 30/70 to 100/0 is defensible; market-cap-weighted is the most academically supported default.
- Should I include emerging markets?
- Yes for full diversification, but at lower weights (5-15%). Emerging market real returns since 1900 are similar to developed but with much higher volatility.
Stress-test your own FIRE plan
FIRE Wealth OS runs your savings rate and expenses against every historical market starting point since 1871. Free to use, no card required.